BIRMINGHAM, Ala. — The Birmingham City Council has approved zoning changes to build 64 rental cottages and townhomes on the former Carraway Hospital site, marking a key step in redeveloping the long-vacant 50-acre campus along Carraway Boulevard in the Northside neighborhood. Construction by Star Uptown developers is slated to begin in early 2026, with units available by 2027, including a community clubhouse, as part of broader plans that already include an amphitheater. The project aims to revitalize an area bordered by Norwood, Druid Hills and other communities, but residents worry it could draw outside speculators and hedge funds, pricing out local families in favor of corporate rentals.
Carraway Hospital, founded in 1908 by Dr. Charles N. Carraway as a 16-bed infirmary in Pratt City, moved to Norwood in 1917 and grew into a 617-bed facility known for its landmark blue star placed atop the roof in 1958. It pioneered Alabama’s first multi-specialty medical group with the Norwood Clinic in 1926, added a Level 1 trauma center and Lifesaver helicopters in later decades, but filed for bankruptcy in 2006 amid financial woes tied to the declining neighborhood and closed permanently on Oct. 31, 2008. Demolition of the site wrapped up recently, leaving the property dormant for years before this rental phase.
Norwood residents, a historically Black community long impacted by disinvestment, express fears that the build-to-rent model could exacerbate gentrification pressures already straining nearby properties. Council approval came despite concerns the influx of new rentals might inflate land values, making homeownership harder for working families while attracting Wall Street investors who dominate national single-family rental markets. Developers have not detailed ownership structure, but similar projects elsewhere have seen hedge funds snap up entire neighborhoods, displacing locals.
City officials tout the homes — a mix of one-, two- and three-bedroom units — as boosting Northside revitalization without immediate sales that could flood the market. Yet community advocates question if safeguards exist against corporate buyouts, noting Birmingham’s history of outside capital reshaping Black neighborhoods like Norwood, where Carraway once anchored jobs and care. The zoning shift from the Dec. 1 council vote opens the door, but long-term effects on property values and affordability remain unaddressed in public plans.